Shared prosperity : links to growth, inequality and inequality of opportunity
AbstractFocusing on the welfare of the less well off as a measure of real societal progress is the fundamental principle underlying the WBG indicator of"shared prosperity", namely income growth of the bottom 40 percent in every country. This paper uses a database assembled by the World Bank Group to investigate some basic characteristics of shared prosperity, particularly its relationship with overall economic growth and inequality. Initial estimates using this dataset of 79 countries show that median income growth of the bottom 40 percent (circa 2005-2010) was 4.2 percent, a high number in comparison to the 3.1 percent per capita income growth of the overall population. In addition, the low and lower-middle income countries appear to be trailing the upper middle and high income countries in boosting shared prosperity. Establishing conceptual links between income growth of the bottom 40 percent, the overall growth rate and reviewing existing evidence on how these relate to inequality, the paper discusses two main ideas. First, shared prosperity is strongly correlated with overall prosperity implying that the whole host of policies that are important to generate and sustain growth remain relevant. Second, boosting shared prosperity will also require a concerted effort to strengthen the social contract, particularly in the area of promoting equality of opportunity. Growing evidence suggests that improving access for all and reducing inequality of opportunities -- particularly those related to human capital development of children -- are not only about"fairness"and building a"just society", but also about realizing a society's aspirations of economic prosperity.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by The World Bank in its series Policy Research Working Paper Series with number 6649.
Date of creation: 01 Oct 2013
Date of revision:
Rural Poverty Reduction; Inequality; Achieving Shared Growth; Poverty Impact Evaluation; Services&Transfers to Poor;
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-10-18 (All new papers)
- NEP-DEV-2013-10-18 (Development)
- NEP-LTV-2013-10-18 (Unemployment, Inequality & Poverty)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Marrero, Gustavo A. & Rodríguez, Juan G., 2013.
"Inequality of opportunity and growth,"
Journal of Development Economics,
Elsevier, vol. 104(C), pages 107-122.
- Currie, J & Thomas, D, 1996.
"Does Head Start Help Hispanic Children?,"
96-17, RAND - Labor and Population Program.
- Benjamin, Dwayne & Brandt, Loren & Giles, John, 2010.
"Did higher inequality impede growth in rural China ?,"
Policy Research Working Paper Series
5483, The World Bank.
- Dwayne Benjamin & Loren Brandt & John Giles, 2011. "Did Higher Inequality Impede Growth in Rural China?," Economic Journal, Royal Economic Society, vol. 121(557), pages 1281-1309, December.
- Francisco H. G. Ferreira & Jérémie Gignoux, 2011.
"The Measurement Of Inequality Of Opportunity: Theory And An Application To Latin America,"
Review of Income and Wealth,
International Association for Research in Income and Wealth, vol. 57(4), pages 622-657, December.
- Ferreira , Francisco H. G. & Gignoux, Jeremie, 2008. "The measurement of inequality of opportunity : theory and an application to Latin America," Policy Research Working Paper Series 4659, The World Bank.
- Loayza, Norman V. & Raddatz, Claudio, 2010.
"The composition of growth matters for poverty alleviation,"
Journal of Development Economics,
Elsevier, vol. 93(1), pages 137-151, September.
- Loayza, Norman V. & Raddatz, Claudio, 2006. "The composition of growth matters for poverty alleviation," Policy Research Working Paper Series 4077, The World Bank.
- Inchauste, Gabriela & Azevedo, João Pedro & Olivieri, Sergio & Saavedra, Jaime & Winkler, Hernan, 2012. "When Job Earnings Are behind Poverty Reduction," World Bank - Economic Premise, The World Bank, issue 97, pages 1-6, November.
- Sen, Amartya, 2001. "Development as Freedom," OUP Catalogue, Oxford University Press, number 9780192893307.
- Jonathan David Ostry & Andrew Berg & Jeromin Zettelmeyer, 2008.
"What Makes Growth Sustained?,"
IMF Working Papers
08/59, International Monetary Fund.
- Sarah Voitchovsky, 2005. "Does the Profile of Income Inequality Matter for Economic Growth?," Journal of Economic Growth, Springer, vol. 10(3), pages 273-296, 09.
- Rodrik, Dani & Alesina, Alberto, 1994.
"Distributive Politics and Economic Growth,"
4551798, Harvard University Department of Economics.
- Easterly, William, 2007. "Inequality does cause underdevelopment: Insights from a new instrument," Journal of Development Economics, Elsevier, vol. 84(2), pages 755-776, November.
- Harold Alderman & John Hoddinott & Bill Kinsey, 2004.
"Long Term Consequences Of Early Childhood Malnutrition,"
HiCN Working Papers
09, Households in Conflict Network.
- Harold Alderman & John Hoddinott & Bill Kinsey, 2006. "Long term consequences of early childhood malnutrition," Oxford Economic Papers, Oxford University Press, vol. 58(3), pages 450-474, July.
- Alderman,Harold & Hoddinott, John & Kinsey, Bill, 2003. "Long-term consequences of early childhood malnutrition," FCND discussion papers 168, International Food Policy Research Institute (IFPRI).
- Alderman,Harold & Hoddinott, John & Kinsey, Bill, 2003. "Long-term consequences of early childhood malnutrition," FCND briefs 168, International Food Policy Research Institute (IFPRI).
- Francisco Ferreira & Jérémie Gignoux & Meltem Aran, 2011.
"Measuring inequality of opportunity with imperfect data: the case of Turkey,"
Journal of Economic Inequality,
Springer, vol. 9(4), pages 651-680, December.
- Ferreira, Francisco H. G. & Gignoux, Jeremie & Aran, Meltem, 2010. "Measuring inequality of opportunity with imperfect data : the case of Turkey," Policy Research Working Paper Series 5204, The World Bank.
- Azevedo, Joao Pedro & Inchauste, Gabriela & Olivieri, Sergio & Saavedra, Jaime & Winkler, Hernan, 2013. "Is labor income responsible for poverty reduction ? a decomposition approach," Policy Research Working Paper Series 6414, The World Bank.
- Michael Grimm, 2011. "Does inequality in health impede economic growth?," Oxford Economic Papers, Oxford University Press, vol. 63(3), pages 448-474, July.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Roula I. Yazigi).
If references are entirely missing, you can add them using this form.